The Impact of E-Verify on Louisiana’s Economy

Some members of Congress have proposed making it mandatory for all employers to use E-Verify—the federal, web-based program through which U.S. businesses can verify the work authorization of new hires. However, mandatory E-Verify without immigration reform is not a solution to the problem of unauthorized immigration. Addressing the reality of a workforce that relies on unauthorized immigrants requires a more comprehensive package of reforms—including a legalization program that brings unauthorized workers out of the shadows, and the creation of sufficient legal visas for the immigrant workers America needs. Mandatory E-Verify alone is likely to harm the economy and U.S. workers.

Mandatory E-Verify without immigration reform will result in lost tax revenue for Louisiana.

Households headed by unauthorized immigrants in Louisiana paid $80.7 million in state and local taxes in 2010, according to estimates prepared for the IPC by the Institute for Taxation and Economic Policy.

If E-Verify is made mandatory, unauthorized workers will move into the unregulated, underground economy where they will be paid under the table. As a result, Louisiana will lose $9.5 million in income tax revenue from these workers.

Unemployment in Louisiana will likely INCREASE as a result of mandatory E-Verify.

Louisiana’s civilian labor force is 2,060,700 workers, and its unemployment rate is 8.2%.

Surveys of E-Verify have found that between 0.8% and 2.3% of workers received an erroneous response from E-Verify, meaning they had to either correct their records or lose their jobs. Applying the error rates to Louisiana, we estimate that between 16,486 and 47,396 U.S. citizens and legal workers in Louisiana would either have to correct their records to keep their jobs.

An estimated 0.5% of workers receive an erroneous final non-confirmation. In Louisiana, up to 10,304 U.S. citizens and lawful workers would receive an erroneous final non-confirmation and lose their jobs.

Currently, only 2,237 businesses in Louisiana are enrolled in E-Verify, which amounts to 2.7% of all Louisiana businesses. Mandatory E-Verify would mean a 3,600% increase in the number of businesses using E-Verify in a short time period.

Small businesses would be hardest hit. In Louisiana, there are 80,188 small businesses, and 97% of all state employers are small businesses.

Bloomberg estimated that E-Verify would cost small business $435 per year. That amounts to more than $34.9 million per year paid by small businesses in Louisiana to use E-Verify.